Airbnb hosts, short-term rental critics facing off over regulations at appeal hearing

A years-long battle over how to regulate short-term rentals in Toronto is continuing this week at the province's Local Planning Appeal Tribunal (LPAT), with some arguing the city's proposed rules are a "deflection" from policymakers' attempts to fix an ongoing affordable housing shortage.

The regulations, which focus on the short-term rentals available through companies such as Airbnb and Vrbo, were approved by council in 2018. Multiple hosts appealed the rules before they could be put into place.

At the start of the appeal proceedings on Monday, city lawyer Sarah O'Connor stressed how the popular practice of renting out units short-term raises multiple challenges for the city, from land use conflicts, to the destabilization of established residential neighbourhoods, to affordable housing issues.

"Regulating short-term rentals will increase housing affordability and accessibility, and we think with Toronto's housing crisis, that is needed right now," noted lawyer Monica Poremba, who is representing Fairbnb Canada, a national coalition calling for regulations around home-sharing.

A 2019 report from the organization — which has been dubbed a hotel industry lobbying group by its critics — suggested around 6,500 homes could be added to Toronto's housing market if Airbnb were to voluntarily comply with the proposed rules.

Those rules include restricting rentals to the owner's principal residence, and would require hosts to register with the city and pay a four per cent municipal accommodation tax. The proposed regulations would also allow an entire primary residence to be rented out when an owner or long-term tenant is away, up to 180 nights each year.

But critics say the proposals won't fix Toronto's housing crunch, with thousands more units needed on an annual basis beyond what could be generated by turning short-term rental units into conventional housing options.

• Airbnb draining 6,500 homes from Toronto housing market, group says in new report
• Airbnb fights back against Toronto councillors' call for platform to 'play by the rules'

The changes are "a deflection of the city's responsibility for its own failure to invest in purpose-built rental housing," said Sarah Corman, a lawyer representing one of the appellants, in her opening remarks.

What the city needs is affordable housing, not the higher-end condo units which represent many short-term rentals, she added.

Short-term rentals have 'corrosive' effect

The debate is also playing out outside the tribunal, including in Kensington Market, where residents say they're battling evictions from landlords hoping to turn units into short-term rentals.

• Airbnbs have 'serious impact' on Toronto housing despite making up less than 1% of dwellings, expert says

Matthew Toth, who has lived in the popular tourist destination for five years, said one landlord bought multiple buildings in the neighbourhood and tried to force residents out — leaving what many call "ghost hotels," where units are often left empty.

"I've seen the corrosive effect it can have on a whole block of buildings, where you don't really have neighbours," he said. 

The practice also leaves evicted tenants struggling to find new, affordable places to live, Toth added.

Many hosts, meanwhile, say listing their units online is their way of handling soaring housing costs.

• How Toronto's proposed short-term rental regulations compare to other cities

Scarborough resident Paul Nedoszytko was among those gathered to hear the appeal hearing, and said his short-term rental helps him afford his home.

An Airbnb host for the last six years, Nedoszytko rents out a basement unit in the house he's lived in for more than three decades. Though he long rented to traditional long-term tenants, he said his switch to the short-term market was sparked by one "extremely bad incident" with a problematic tenant, involving damage to his car and police visits to his home.

"Most long-term tenants are responsible," he added. "And there's a need for that."

Still, Nedoszytko doesn't plan on ever making the switch back. He also stressed his unit offers a much-needed service beyond rentals for tourists, such as a space to live for workers juggling business trips or commutes between cities.

Now, Nedoszytko's ultimate hope is that the city goes back to the drawing board when it comes to the regulations.

Hosts feel regulations are 'infringement on their rights'

But according to city officials, the proposed rules were drafted based on extensive consultation, including surveys, public meetings and focus groups with stakeholders.

Airbnb — one of the biggest players in the short-term rental market — participated throughout that process, along with many hosts.

"It's clear our hosts feel the final regulations represent an infringement on their rights to share the space within the house where they live and we firmly support their right to appeal at the LPAT," Airbnb spokesperson Alex Dagg said in a statement provided to CBC Toronto on Monday.

"We are hopeful that the board will hear their concerns and put forward recommendations that ensure any regulations balance housing availability concerns with the right of everyday people to share their homes."

Other Canadian cities are ahead of Toronto in implementing regulations; Montreal has both provincial and city regulations on who can operate a short-term rental, as well as restrictions on neighbourhoods in which they're allowed, while Vancouver has regulations that apply to the entire city, and requires hosts to have a business licence.

Toronto's LPAT hearing continues throughout the week.